Nov 29, 2016

I’m being audited by the IRS

Just four days after the election of Donald Trump I received an audit letter from the IRS.

My first suspicion was that is was a vendetta for having written my earlier blog suggesting to our new President that the entire IRS be moved to Detroit. I consider the IRS to be the most powerful and corrupt agency in the government. It needs to be taught a lesson and to help Detroit.

The audit letter only covers my business expenses in 2014. It is not a hard audit to complete because I keep a fairly reliable calendar and all my expenses are on credit cards.

Several interesting issues are raised for me.

This is my first audit in 63 years of paying U.S. income taxes. I have probably paid well over $100,000 in Federal income taxes. That was in unadjusted dollars. Inflation adjusted dollars would be at least three times that. Theoretically there should be a point in life where you no longer get audited. Theoretically.

I have never had a single source of income that would make sense of my expenses. My revenue stream comes from book royalties, lectures, honoraria, expert witness work in a dozen fields, business consulting, publishing books, Internet sales of radio interviews and other miscellaneous sources. How could a salaried IRS employee be expected to understand the marketing efforts I need to generate revenue in all those fields? They can’t.

Lastly, as I get older my clients retire from their businesses, die and drift off in many ways. My expert witness fees come from plaintiff cases where the plaintiff only gets paid if they win and the payment can still be a year after they win. Thus my annual revenue is erratic, volatile. But my my marketing efforts remain fairly constant. So examining expenses has to be done without a direct connection to revenue.

Enough. These are the standard problems of a small business. Which is why banks don’t make loans to small businesses.

Comments

I’m being audited by the IRS

Just four days after the election of Donald Trump I received an audit letter from the IRS.

My first suspicion was that is was a vendetta for having written my earlier blog suggesting to our new President that the entire IRS be moved to Detroit. I consider the IRS to be the most powerful and corrupt agency in the government. It needs to be taught a lesson and to help Detroit.

The audit letter only covers my business expenses in 2014. It is not a hard audit to complete because I keep a fairly reliable calendar and all my expenses are on credit cards.

Several interesting issues are raised for me.

This is my first audit in 63 years of paying U.S. income taxes. I have probably paid well over $100,000 in Federal income taxes. That was in unadjusted dollars. Inflation adjusted dollars would be at least three times that. Theoretically there should be a point in life where you no longer get audited. Theoretically.

I have never had a single source of income that would make sense of my expenses. My revenue stream comes from book royalties, lectures, honoraria, expert witness work in a dozen fields, business consulting, publishing books, Internet sales of radio interviews and other miscellaneous sources. How could a salaried IRS employee be expected to understand the marketing efforts I need to generate revenue in all those fields? They can’t.

Lastly, as I get older my clients retire from their businesses, die and drift off in many ways. My expert witness fees come from plaintiff cases where the plaintiff only gets paid if they win and the payment can still be a year after they win. Thus my annual revenue is erratic, volatile. But my my marketing efforts remain fairly constant. So examining expenses has to be done without a direct connection to revenue.

Enough. These are the standard problems of a small business. Which is why banks don’t make loans to small businesses.